Philippine economy

PH expects another investment grade in 2013
The central bank is aiming for another credit rating upgrade from either Moody's or Standards & Poor's

MANILA, Philippines (UPDATED) – The Philippines may get another credit rating upgrade this 2013.

This is according to the Bangko Sentral ng Pilipinas’ Investor Relations Office (IRO) executive director Claro Fernandez who cited expectations on the country’s “good credit story.”  

“The feedback I am getting from the market is that the Republic will get an upgrade from another credit rating agency within the year. And we believe this,” Fernandez said in an interview with reporters on Wednesday, April 3. 

Fitch Ratings awarded the Philippines its first-ever investment grade rating on March 27. The ratings agency upgraded the country’s long-term foreign currency debt rating to BBB- from BB+. The investment grade rating lowers borrowing costs for the government and makes the country more attractive to foreign investors and fund managers.

Aside from Fitch, investors and policy makers are awaiting for the decision of other international credit watchers, especially Standard & Poors (S&P) and Moody’s Investor Services. S&P’s rating decision is expected to be announced likely in May or June, while Moodys’ would be before yearend. 

“It’s hard to say but that should be soon forthcoming, especially in the case of the S&P,” Budget Secretary Florencio Abad said when asked to comment.

“The market rates us at least two notches above investment grade making us one of the most underrated countries. I hope they will see the light soon,” added Finance Secretary Cesar Purisima.

Fernandez added that the country’s chance of getting another credit upgrade is based on its rising number of investment opportunities.

“The upgrade from Fitch is a vote of confidence. And we are expecting that this will be followed by more positive feedback as the government pushes for institutionalizing good governance to make it easier for business to set up and operate in the Philippines,” said Fernandez.

Fernandez added that the country has received 6 credit ratings upgrades from Fitch, Moody’s and Standard & Poor’s since 2010.

“This and the changes in the way the Philippines is doing business push us closer to a virtuous cycle of attracting more business, creating more jobs, expanding buying capacity, creating more business opportunities and developing a faster moving, more sustainable economy,” he said. –

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